PenCom Has Made Nigeria’s Pension Industry Safe For Pensioners– Wabba

As Nigeria’s pension assets continue to grow, the Nigerian Labour Congress President, Ayuba Wabba, has attributed the growth recorded in the industry to the regulatory intervention of the National Pensions Commission.

Nigeria’s pension assets have appreciated from N3tn in 2012 to N14.2tn in May 2022.

But there are fears that the benefits of the growth would be eroded by inflation which currently stands at 19.64 per cent in July, according to the National Bureau of Statistics.

The NLC boss, Wabba, said in an interview on Arise TV monitored by THE WHISTLER that pensioners will have their funds secured as the NLC is engaging the regulator on innovative measures to hedge against inflation.

PenCom has been strategic in its ambition to grow the pension industry and induce confidence in the system.

The regulators concluded a recapitalisation exercise for Pension Funds Administrators from N1bn to N5bn, leading to the reduction of the number of PFAs from 22 to 20.

Pension laws allow fund managers to invest 25 per cent in equities, 35 per cent in the money market and the rest in government bonds.

THE WHISTLER had reported that N8.5tn or 60.9 per cent of the fund assets was invested in federal government securities.

PFAs also invested N2.25trn in money market instruments, while N1.17tn was invested in Corporate Debt Securities like Corporate Bonds, Corporate Infrastructure Bonds and Corporate Green Bonds.

Wabba said, “I can tell you that first there is a very clear regulatory framework that regulates the entire pension industry and I can tell you that it is a very strong regulatory framework because one, you have the Pension Fund Administrators, you have the pension fund custodians.

“So, the PFAs cannot actually deep hands into the Contributory Pensions Scheme because they are secured. And you have also PenCom that is the regulator and I can say PenCom they have been doing well to make sure that everybody plays according to the rules.

“Even in investment, the issue of risk is a major factor that is under consideration. When you are investing the pension funds because they are invested in very clear portfolios that don’t have much risk, so that you don’t take workers money that they will rely on when they are weak and invest it in a portfolio that tomorrow you will say the money is no longer there especially in ponzi schemes.

“So, it is highly regulated and when you are investing this fund, PenCom must actually approve. They don’t invest in high yield where there is risk. One of them is the federal government bond. Everywhere around the world, they are actually secured. Even the FG cannot deep its hands into the pensions fund.”

Wabba explained that PFAs are bound by law to follow the right process before investing pension funds in those portfolios that will deliver maximum returns.

He added, “Those returns will be returns that will reflect in the retirement savings account of the pensioners.

“Inflation is impacting on all sectors of the economy and it has actually impacted on the pensioners and that is one of the issues we have raise with PenCom to say that can we also be innovative and look at the issue of inflation and try to make sure that the funds of pensioners are also protected and the pensioners will not suffer the consequences of the collapse of the economy.”